Iran’s Lower Profit From Sanctions Relief Won’t Mollify Congress

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“Every business in Iran has been hurt by the sanctions,” Ramin Rabii, managing director of Turquoise Partners, a Tehran-based investment firm, said in an interview. “Even those that were not hit financially, their ease of doing business worsened, trading with the world, sending money back and forth, using financial institutions — all became next to impossible. Everyone got hurt.”

A report co-written by the Foundation for Defense of Democracies, a pro-sanctions policy group in Washington, and New York-based Roubini Global Economics, a macroeconomic research firm, challenges the administration’s figures, estimating that Iran received $11 billion in direct benefits during the first six months of this year.
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Newfound confidence that sanctions will be lifted has improved Iran’s runaway inflation, halted the free fall of its currency and allowed for some improvement in its GDP, according to separate analyses by the Foundation for Defense of Democracies and Roubini and United Against Nuclear Iran, a New York-based policy group.

“It hasn’t been ‘limited’ sanctions relief,” Mark Dubowitz, executive director of the foundation, said in an interview. “An economy that used to be on its back is now an economy on its knees and getting back up to its feet.”

Michel Makinsky, a lecturer on Iranian politics and economy at France Business School in Poitiers, said the interim deal spurred a “slowing of inflation, an improvement in the rial exchange rate,” and “more than anything, there’s been a psychological effect, giving foreign companies the will to look for expansion and investments” with an expectation that sanctions will be fully lifted in the future.

Dubowitz predicts that the indirect benefit will grow in the coming seven-month extension, with the delayed effects of new auto and petrochemical deals encouraging factories to be opened or reopened and spurring job creation.
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